Prosecutors said he used $2 million of the money hecollected from three hedge funds to pay his own expenses andcover redemption requests from prior investors, according to thecriminal complaint dated Feb. 7.

A lawyer who has previously represented Konior did notimmediately respond to requests by phone and email for comment.

Konior advertised that his fund provided trading leverage tonew and emerging hedge funds, according to prosecutors. He saidhe would match the hedge funds' investment by up to nine timesand put the money into brokerage accounts that investors coulduse to trade securities, the complaint said.

If an account lost money, the hedge fund investor would bearthe losses, until its contribution ran out. If the accountearned profits, they would be split between the individualinvestor and Absolute.

In emails, text messages and phone conversations, Koniorsaid he was establishing brokerage accounts for the three hedgefund investors when he had already stolen their money, the U.S.Attorney's Office for the Southern District of New York said ina statement.

Prosecutors charged Konior with securities fraud and wirefraud, each of which carries a potential penalty of up to 20years in prison.

Konior is expected to be presented in Manhattan federalcourt before U.S. Magistrate Judge James Cott on Wednesday, theU.S. Attorney's Office said.

Last May, the Securities and Exchange Commission broughtsimilar allegations against Konior.

The criminal case is USA v. Konior, U.S. District Court forthe Southern District of New York, No. 13-mag-369.